Publication: Testing for asymmetry in okun’s law: evidence from Turkey
Abstract
Türkiye, güçlü ekonomiye geçiş programının uygulandığı tarih olan 2001 yılından bu yana bir takım ekonomik gelişmeler kaydetmiştir. Özellikle, bu tarihten sonra elde edilen ekonomik büyüme göze çarpmaktadır. Bununla birlikte, bir takım ekonomik gelişmeler elde edilmesine rağmen, ekonomide bazı problemler ortaya çıkmıştır. Yüksek ve kalıcı işsizlik bu problemlerden bir tanesidir. Bu dönemdeki kalıcı işsizlik oranı göze çarpmaktadır. Bu çalışmanın amacı, 2001:Q1-2012:Q4 dönemleri arasında, Türkiye’deki ekonomik büyüme ile işsizlik arasındaki ilişkiyi analiz etmektir. Bu anlamda, iki değişken arasındaki doğrusal olmayan ilişkiyi ortaya çıkarabilmek için eşik otoregresif modeli kullanılmıştır. Diğer bir ifadeyle, değişkenler arasında asimetrik bir ilişkinin var olup olmadığı Hansen (1996, 2000)’in geliştirdiği yöntem ile analiz edilmiştir. Sonuçlara göre, Türkiye’de Okun yasasında asimetrik bir ilişki söz konusudur. Buna ek olarak, asimetrinin sebebinin, işgücüne katılım oranındaki değişimler olabileceği sonucuna varılmıştır.
Turkey has several economic developments since 2001 in which Transition Program for Strengthening the Economy has been started to apply. Especially, growth rate of Turkey is undoubtedly notable after this time. However, even though there are several developments in the economy, some drawbacks have been emerged in the same period. High pattern of unemployment in spite of high economic growth is one of these problems. In this sense, persistent high unemployment rate has been observed since 2001. The aim of this paper is to analyze the relationship between economic growth and unemployment between the period of 2001:Q2-2012:Q4 in Turkey. To that end, a threshold autoregressive model is applied in order to detect whether this relationship has a nonlinear pattern. In this context, the procedure of Hansen (1996, 2000) is employed in order to see if there is an asymmetric relationship between these two variables. According to the results, there is an asymmetry in Okun’s law in Turkey for the period between 2001-2012. In addition, it is concluded that the asymmetry in Okun’s law may result from the changes in labour force participation rate.
Turkey has several economic developments since 2001 in which Transition Program for Strengthening the Economy has been started to apply. Especially, growth rate of Turkey is undoubtedly notable after this time. However, even though there are several developments in the economy, some drawbacks have been emerged in the same period. High pattern of unemployment in spite of high economic growth is one of these problems. In this sense, persistent high unemployment rate has been observed since 2001. The aim of this paper is to analyze the relationship between economic growth and unemployment between the period of 2001:Q2-2012:Q4 in Turkey. To that end, a threshold autoregressive model is applied in order to detect whether this relationship has a nonlinear pattern. In this context, the procedure of Hansen (1996, 2000) is employed in order to see if there is an asymmetric relationship between these two variables. According to the results, there is an asymmetry in Okun’s law in Turkey for the period between 2001-2012. In addition, it is concluded that the asymmetry in Okun’s law may result from the changes in labour force participation rate.